AT&T speaks on tethering, iPhone 3G S preorders, upgrades

We spoke with an AT&T representative to get the details on subsidized, early …

As you undoubtedly know, Apple announced an updated iPhone 3G S today during a painfully long WWDC keynote. Since the US is one of six countries that will be the first to get access to the new hardware on June 19, AT&T also made an announcement today about pricing, pre-ordering, and upgrades for existing iPhone users. Furthermore, an AT&T representative clarified the company's support for MMS and tethering features that will be coming to all iPhones with the update to iPhone OS 3.0.

As Phil Schiller mentioned during the keynote, the iPhone 3G S will be available in 16GB and 32GB configurations. For new and "qualifying" customers, those models are available for $199 or $299 with a new two year contract, respectively. Also, the 8GB iPhone 3G will stay in the lineup, and new or qualifying users can grab one for just $99 with a two year contract. AT&T will continue to offer the 16GB iPhone 3G, while supplies last, for $149.

For current iPhone customers, however, the options are a little tricky. "Upgrade eligibility varies with each customer, but in general you will become upgrade-eligible the further you are into your service agreement," AT&T spokesperson Seth Bloom told Ars. Typically AT&T will allow for full subsidized pricing after about 18 months. AT&T's website wasn't updated at the publish time, but you can check your "eligibility" online via Apple's online ordering page. (For those of us on staff who bought an iPhone 3G on launch day last year, it looks like we won't qualify for subsidized pricing until this December.) We have already heard expressions of severe dismay from many other iPhone 3G users being told they cannot upgrade before 2010.

If you're not eligible for standard subsidized pricing, you can get an "early upgrade" to the iPhone 3G S for $399 for a 16GB model or $499 for a 32GB model. If you just want an iPhone 3G, you can get an early upgrade for $299. None of those options are much of a deal, but if you want an iPhone 3G S as soon as possible, that's what it will cost you. Either way, upgrading will include a new two-year contract and an $18 upgrade fee.

Further, AT&T also says that no-commitment pricing will be available for the iPhone 3G S. That will run you $499 for an 8GB iPhone 3G, $599 for a 16GB iPhone 3G S, and $699 for a 32GB iPhone 3G S—ouch. The benefit is that you don't have to agree to any contract for any amount of time, but an AT&T iPhone plan is required to activate any iPhone with AT&T, and those plans still start at $70 per month.

AT&T is now accepting pre-orders for the iPhone 3G S both online and in its corporate-owned retail stores beginning sometime after 5pm today. Orders placed online will ship directly to your address while orders made in a store will be available for pick-up on or after June 19. AT&T notes that iPhones will be supplied on a first come, first served basis, and pre-ordering is the only way to avoid waiting in line all next weekend. Apple also appears to be accepting pre-orders at this time for single-line activations or upgrades only.

Regarding the MMS and tethering features that are part of the iPhone OS 3.0 upgrade, AT&T tells us that both features are in fact coming. MMS support is delayed until later this summer, as Apple SVP Scott Forstall mentioned during the keynote. "We absolutely will offer MMS on iPhone 3G S in the late summer, once we complete some system upgrades that will ensure our customers have the best experience with MMS," Bloom told Ars. "These upgrades are unrelated to our 3G network," he added.

Also, Bloom said, "we plan to offer a tethering plan but we don't have anything to announce today." That may be some small bit of good news for iPhone users, especially those who loudly groaned and booed when it was indirectly announced during the keynote (via AT&T's glaring absence on a slide full of carrier logos) that AT&T was not going to support tethering. Chances are, however, that it could cost as much as $30 extra per month for the privilege, just as current tethering plans for other phones do.

In all, it seems folks are mostly disappointed with the mixed news regarding AT&T's handling of service and pricing for the iPhone. Despite Apple claiming to be happy with AT&T as the exclusive carrier in the US, it doesn't seem likely Apple is too keen on AT&T lagging behind other carriers in support of MMS and tethering. And it seems that consumers' needs, especially when it comes to pricing, won't be truly addressed until the iPhone is available from more than one carrier.

The past weekend I was crushed when I went to the Best Buy in Denver and there were NO models available for demonstration and the unit is $850 w/out contract.

The Pre (like the iPhone) is not that much more R&D and parts than iPod Touch (street price of $230?). Certainly not an additional $600+. If the phones cost $50 for a cheap crapper and $400 for the "hot stuff" I would buy a few phones a year. Retailers and such should be able to get the normal margins and make more money AND I get more toys.

Why do they not get this? (I know why, that is a novel yet to be written).

I don't have any problem with subsidized pricing, but allowing one large company who makes devices, to contract with another large company who provides service behind closed doors with unknown terms, to the detriment of consumer choice, is ridiculous.

Part of why Apple went with ATT in the beginning was supposedly because they would play ball with the features Apple wanted to offer. Well, now they're dragging their feet and pricing out the ass for new features. Time to dump them and open this thing up for other networks, officially.

And it seems that consumers' needs, especially when it comes to pricing, won't be truly addressed until the iPhone is available from more than one carrier.

I'm all for making the iPhone available on other carriers, but this sentence makes no sense whatsoever.

What other carrier - Verizon, T-Mobile, or Sprint - allows you to qualify for a fully subsidized phone less than one year after your last subsidized phone? Oh, that's right, none of them.

It's quite shocking to see just how many people have no idea at all how cellular contracts work in the US.

Most of us understand quite well. Their point is referring more to how AT&T has absolutely no incentive to please any of their customers. With an exclusive contract, the vast majority of iPhone users are stuck waiting on MMS and other features until AT&T decides that they're finally ready to roll it out ... months after Apple rolls out the update that makes it possible.

And, don't tell me AT&T didn't know it was coming. Almost every other cell phone has had things like MMS for at least 2 years. While Apple is still responsible for some of the blame on this, AT&T has been the one dragging their feet.

Get these things on other carriers, give people a choice who they want to go with, and I'm willing to bet that AT&T suddenly finds all sorts of motivation to get features out fast and cheaper. Until then, we take it the way AT&T wants to give it.

I do have a problem with the pricing. Apple needs to educate AT&T that the iPhone users are not like other phone users. If Apple upgrades the hardware this often -- and I'm pleased Apple does -- then it must persuade, enlighten or cudgel AT&T into providing a reason for an iPhone user to upgrade without emptying what remains of the user's IRA.

Note to gen-1 iphone users - AT&T reps confirmed - apart from an 18-dollar "transfer fee" - your plan and price migrates to new equipment as-is. The upshot? You pay 360.00 per-year less than new users for the same plan on the new hardware (450minutes, 200messages, unlimited data at 59.99 vs new customers paying 74.99 for same).

@Kempai Tai I have no idea why you're talking about MMS. MMS was never mentioned in my post, nor was it relevant to the part of the story that I was commenting on. Perhaps you meant to reply to someone else...I could not care less about MMS one way or the other.

For current iPhone customers, however, the options are a little tricky. "Upgrade eligibility varies with each customer, but in general you will become upgrade-eligible the further you are into your service agreement," AT&T spokesperson Seth Bloom told Ars. Typically AT&T will allow for full subsidized pricing after about 18 months

I'm eligible for upgrade after 12 months (3G in August 2008, eligible in August 2009), but I've also been an AT&T (nee Cingular, nee AT&T) subscriber since 1998. Oddly, my sister (who has had a phone since 2003) is on my family plan and is eligible after 18 months.

Just got off the phone with AT&T. Was told that I am eligible for discount pricing on a new phone because I have been a "good" customer for a number of years. Discount pricing means nothing when it comes to an iPhone. New customer or existing, you pay the same price.

Sometimes I think that they forget that customer retention is just as important as gaining new customers. I will get the new iPhone 3Gs (gotta have it, and that is what AT&T is counting on), but all bets are off when their contract with Apple is over.

AT&T has done plenty to alienate me with average service, average network quality, and expensive pricing. Their lagging behind on all of these will not help them when they no longer have a contract with Apple, and the playing field is leveled.

anyway, what's the deal with not being able to tether? i have at&t, with a sony ericsson w760a that i reflashed to a generic firmware. i am able to tether via bluetooth and usb with no problem, and get 3G connectivity.

Originally posted by bigmig:What other carrier - Verizon, T-Mobile, or Sprint - allows you to qualify for a fully subsidized phone less than one year after your last subsidized phone? Oh, that's right, none of them.

Um, I don't know about the others, but Verizon definitely does. If you're on a one-year contract, which Verizon is the only one left to still offer it, you can upgrade after 10 months.

Despite Apple claiming to be happy with AT&T as the exclusive carrier in the US, it doesn't seem likely Apple is too keen on AT&T lagging behind other carriers in support of MMS and tethering.

Yeah, I didn't exactly get the warm fuzzy feeling from Apple to AT&T during that keynote. They could have found ways to couch AT&T's lack of features, but instead decided to point blank announce those gaps, and got the rather predictable negative response.

Who'll bet that Apple told AT&T about these new features a long time ago, yet AT&T took their own sweet time getting their systems up to speed, and this was Apple's rather public way of slapping them in the face for doing it? How much longer until the exclusivity is over if AT&T can't convince Apple to extend it?

Originally posted by mgabrys:Note to gen-1 iphone users - AT&T reps confirmed - apart from an 18-dollar "transfer fee" - your plan and price migrates to new equipment as-is. The upshot? You pay 360.00 per-year less than new users for the same plan on the new hardware (450minutes, 200messages, unlimited data at 59.99 vs new customers paying 74.99 for same).

The savings basically more than pay for the new phone.

Early adopter for the WIN.

Got a link for that? I'm a 1st gen iPhone user that will be upgrading to a 3GS.

Despite Apple claiming to be happy with AT&T as the exclusive carrier in the US, it doesn't seem likely Apple is too keen on AT&T lagging behind other carriers in support of MMS and tethering.

Yeah, I didn't exactly get the warm fuzzy feeling from Apple to AT&T during that keynote. They could have found ways to couch AT&T's lack of features, but instead decided to point blank announce those gaps, and got the rather predictable negative response.

Who'll bet that Apple told AT&T about these new features a long time ago, yet AT&T took their own sweet time getting their systems up to speed, and this was Apple's rather public way of slapping them in the face for doing it? How much longer until the exclusivity is over if AT&T can't convince Apple to extend it?

I absolutely got that feeling too. They basically said that Apple has the feature ready, but you're lousy phone carrier dropped the ball, so you aren't getting it yet.

If you're on a one-year contract, which Verizon is the only one left to still offer it, you can upgrade after 10 months.

That's why I said "fully subsidized", not partially subsidized. The 1-year contract subsidies for VZW are not as big as the 2-year contract subsidies. By that metric, ATT is already delivering - they do, after all, offer to give you a subsidy relative to the no-contract price if you're a current iPhone 3G owner. It's just not as big as the subsidy they will give to a new customer or to someone who has not bought a fully subsidized phone in the past 18-24 months.

"I can pay the ETF (11 months) = $120 and sign up as a new customer and get the phone for $299. Why would AT&T make cancelling their contract a better proposition then simply upgrading?"

If you do that you loose your number... you'd have to take your account to a 3rd party provider, port your number, then sign back up with ATT as a new customer. I believe there's a time constraint on how often you can port your number.

Although they aren't currently selling new ones, when you buy an iPhone 3G directly from ColorWare, it is factory unlocked, no carrier/contract shackles at all. Of course, one pays a premium for this, but that's the only way to get (for example) international SIMs working in it, etcetera.

I hope they are able to offer a factory unlocked iPhone 3GS, because I'm ready to switch over to iPhone, but will never ever pay that much for an AT&T-locked phone.

The day may have been too much for me... but where is the problem here? You can pay the additional 200 bucks and sell the old 3G model on eBay for at least 300, if not more - which makes Apple's "mail-in rebate" a lot more lucrative than others. Heck, buy a cheap TurboSIM or whatever makes the phone simlock-free and put it up for international buyers and it might almost pay the entire 3GS.

I'm on a family plan and bought both my iPhone and iPhone 3G on launch day. For whatever reason, I'm not eligible for an upgrade until 3/12/10, 20 months after I recommitted to AT&T. My friend who got his iPhone 3G on launch day and iPhone shortly after launch day is eligible on 7/12/09, one year after he recommitted to AT&T.

My mom was planning on getting my iPhone 3G once I upgraded, now I just need to decide whether it's worth it for me to sell my 3G on eBay and have us both pick up new ones, or for me to give her mine and pick up a 3G S.

As bad as AT&T is, the only other GSM option in the US is T-Mobile, which has great customer service but a very, very weak network. I don't think Apple wants the headaches of trying to make a CDMA version, so VZW and Sprint are out. Maybe in a few generations when they all get on one standard...

Originally posted by cptncelchu:My mom was planning on getting my iPhone 3G once I upgraded, now I just need to decide whether it's worth it for me to sell my 3G on eBay and have us both pick up new ones, or for me to give her mine and pick up a 3G S.

Its been mentioned before, buy your mom the 3GS (assuming she is upgrade eligible), swap yours and her SIM card. You have the 3GS and she has your old 3G. It should work.

I'll back this up. I preordered one right after the keynote and was eligible for the upgrade (after paying off my most recent bill).

iPhone EDGE wasn't subsidized to begin with, so they wouldn't have any grounds to prevent you from receiving the subsidized price.

No doubts there, I'm more curious about being able to keep the old 1st gen plan. I went through the upgrade on apple's site (but cancelled out) and while I was eligible for the good pricing, it seemed to indicate that the data plan would be $30 a month and no texts for free.

No doubts there, I'm more curious about being able to keep the old 1st gen plan. I went through the upgrade on apple's site (but cancelled out) and while I was eligible for the good pricing, it seemed to indicate that the data plan would be $30 a month and no texts for free.

iPhone -> iPhone 3G upgraders had to switch to the more expensive plan and lose free texts. It's 99.99999% certain that iPhone -> iPhone 3G S upgraders will also have to switch to the more expensive plan and lose free texts.

No doubts there, I'm more curious about being able to keep the old 1st gen plan. I went through the upgrade on apple's site (but cancelled out) and while I was eligible for the good pricing, it seemed to indicate that the data plan would be $30 a month and no texts for free.

Seeing the same there here. I don't like the idea of paying AT&T $15 more a month for the exact same service I am getting now.

Seeing the same there here. I don't like the idea of paying AT&T $15 more a month for the exact same service I am getting now.

Just FYI, if you work for a company (most major corporations) or attend a school that has an agreement with AT&T, you can get the corporate discount for the iPhone 3G plan even though you could not get it for the iPhone plan. In my case, becoming discount eligible offset most of the cost of the higher priced data plan.

I know nothing of tethering costs with mobile carriers, but I'm hoping that it's not too expensive with AT&T. I can't see why they would charge an exorbitant fee just for allowing your data link to flow from your phone to a laptop.

But seeing as during the keynote they said that it would work via USB or BT seamlessly, that's something I could really get some use out of tooling around town with my Macbook.